* Virus drives risk-averse trade in Asia * China GDP misses expectations, but domestic demand impresses * Powell testimony to continue By Tom Westbrook SINGAPORE, July 15 (Reuters) – Spiking coronavirus cases kept the dollar supported in Asia on Thursday and it clawed back a little of a drop which had followed insistence from Federal Reserve chair Jerome Powell that he isn’t in a hurry to withdraw policy support. The dollar was up about half a percent on the New Zealand dollar by midday in Tokyo, up about 0.3% on the Australian dollar and British pound and up roughly 0.1% against the euro. Cities from Seoul to Sydney are under lockdown as the infectious Delta variant sweeps the globe. Infection rates are rising in the United States, Singapore reported its sharpest jump in cases in 10 months on Thursday and Indonesia is living its government’s worst-case COVID scenario. “Growth momentum, business confidence and investor sentiment can be further crippled if lockdowns and restrictions are prolonged,” analysts at Maybank in Singapore said in a note. Mixed economic data in China – showing a largely expected growth slowdown, but signs of more resilient domestic demand – also did little to improve the mood. The safe-haven yen rose broadly, and was last up 0.1% at 109.86 per dollar and close to testing multi-month peaks at 129.91 per euro. The Aussie fell to $0.7453 while the kiwi dipped below 70 cents to $0.6998. “The market is still on an uncertain path,” said National Australia Bank strategist Rodrigo Catril. “The big experiment is really the full reopening in the UK – if that could be successful, we think it’s going to be a huge factor in terms of confidence and pricing a broader and sustained recovery of the global economy.” That could lead to a softer dollar as economies from Japan to Europe catch up with the robust rebound in the U.S., he said. England plans to lift almost all COVID-related restrictions on Monday, even as cases climb. Sterling reflected some nerves about the prospect of failure, and fell below its 20-day moving average to $1.3829. POWELL PUSH Powell returns to Capitol Hill later on Thursday for further testimony before Congress, following remarks that toppled the dollar from a three-month high on the euro on Wednesday. He had soothed rate hike fears by saying high inflation seemed linked to the U.S. economy’s reopening, that it would be a mistake to act prematurely and that economic conditions for tapering bond buying was “still a ways off”. The subsequent support for the dollar, which still sits above its 20- and 200-day moving averages against a basket of six major currencies suggests investors were not entirely convinced. The dollar index was last steady at 92.434. “Was anyone really expecting anything other than a dovish Powell,” OCBC Bank analysts Terence Wu and Frances Cheung asked in a note. “No,” they said. “He didn’t…
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